[Wildwell]

Capitalism is: The means of production are privately owned and operated for profit.

While many visitors of peak oil.com argue about growth, there is very little addressing of fundamental problems of the economic systems we have. Essentially we should be reaching for sustainability and self responsibility, yet can such a system be constructed?

Most western economies are ‘mixed economies’, they aren’t free in the sense there is a great deal of government intervention. This has proved a fairly successful system. Not only has it given wealth and opportunity to millions, it helps preserve liberty and democracy – at least to a point. However it has several ‘design errors’.

1. It tends to shift wealth to the rich and restrict opportunity for the poor without heavy government intervention.
2. The market system is myopic and prone to shifts in confidence – therefore ultimately unstable. (The boom/bust problem)
3. It doesn’t take into account externalities.
4. It doesn’t take into account finite limits.
5. It promotes a pursuit for profit. A business has no social responsibilities other than to post a profit for its owners.
6. Without government intervention it tends to promote monopolies and lack of choice and competition.

So what are the alternatives?

Feudalism – Monarch holds the law-making power and ability to claim ownership. This is a seriously defective system and open to abuse and very unstable. Ditto Dictatorship.

Socialism – The means of production are owned and run by popular collectives. Fine, but doesn’t promote the individual to take responsibility, pursue natural talents and therefore be subject to ‘in fighting’ and possibly lack of innovation.

Communism – similar to the above, but the means of production are owned collectively. It needs heavy state or collective ownership/control. The system is open to abuse from those that hold seats of power.

Command economies, on the whole, don’t work. They limit personal freedom and democracy. People on the whole like owning property. However, it is the pursuit of profit that ultimately shifts the balance of power, creates a lack of sustainability and environmental problems with capitalism – and selfish interest. Although Adam Smith argued that the common good could come from individuals exercising their talent. I agree, but the problem of growth and manipulation comes from the profit. If one was to unplug the ‘profit’ motive from the system, and replace it with a social responsibility and societal award for genius and conduct, and a roots-up approach to self responsibility and family and society values. If companies were all operated on a not-for-profit basis, would it cure some of the intrinsic problems with capitalism? This doesn’t mean that people couldn’t be awarded for hard work or skill with a good salary, far from it, it does however mean however a re-evaluation of the common good, and stepping back from rampant profiteering and exploitation and environmental destruction. Discuss.

BTW There are no wrong and right answers with this subject. People have been arguing about economic systems since time began, so views on the virtues of capitalism and alternative systems are welcome. And no, I haven't decided profits are the only problem or the root of the problem, but I'll need some persuading otherwise.

[jaws]

All human action is driven by profit. Profit is the gain in welfare you receive from your actions. When you get up in the morning to get to your job, you do it for profit. You do it because you expect to be better off if you work than you would be if you just loafed around the house all day.

When someone creates a business, it becomes their employment. They replace the profit that they would earn going to some job by the profit that they will earn serving the needs of their business' clients.

Profit cannot be eliminated without resulting in chaos and the total collapse of civilization. This is why total socialism was so short in the USSR (about two years) and Lenin thought of bringing back private property and only keeping the "commanding heights" of the economy, the big industries, under his control.

[backstop]

Jaws -

one of the great promises of the revolution in Russia, without which it clearly would have lost the civil war, was that every peasant family should have five acres of land.

It was also among the earliest of promises broken, in that in 1919 this was cut to 2 acres to benefit the scale of and labour for the state farms.

Further cuts were made over the years until, in the late '30s the plots were down to a half-acre.
Stalin wanted to cut them by half again, but someone had the courage to point out that although they only made up a few percent of oa farmland,
they provided over 25% of Russia's food.

The idea of further cuts was dropped.


Hoping this may profit you at least by causing you to smile -

quite how writing it profits me I've yet to see.

regards,

Backstop

[Odin]

$this->bbcode_second_pass_quote('Wildwell', 'S')ocialism – The means of production are owned and run by popular collectives. Fine, but doesn’t promote the individual to take responsibility, pursue natural talents and therefore be subject to ‘in fighting’ and possibly lack of innovation.

[Wildwell]

$this->bbcode_second_pass_quote('jaws', 'A')ll human action is driven by profit. Profit is the gain in welfare you receive from your actions. When you get up in the morning to get to your job, you do it for profit. You do it because you expect to be better off if you work than you would be if you just loafed around the house all day.

When someone creates a business, it becomes their employment. They replace the profit that they would earn going to some job by the profit that they will earn serving the needs of their business' clients.

Profit cannot be eliminated without resulting in chaos and the total collapse of civilization. This is why total socialism was so short in the USSR (about two years) and Lenin thought of bringing back private property and only keeping the "commanding heights" of the economy, the big industries, under his control.

[Wildwell]

$this->bbcode_second_pass_quote('kochevnik', ':')!:

How about capitalism with a progressive, energy and raw materials based tax ?

Example, I buy one iPod I pay a 20 percent tax, I buy two (or my family does) then the tax goes to 80 percent. I also pay a 100 percent recycling deposit which I get back when I return the iPod for recycling in 5 years. Eliminate all other taxes (property taxes and income taxes being the most offensive). The taxes are based on the amount of energy (and how it was produced) and depleteable natural resources (and pollution caused) that go into the manufacturing of any product.

This allows each individual to prosper under capitalism, but reduces conspicuous consumption. I think it would also promote local industry as transportation is a big energy waster and small companies and individuals are better placed to use energy resources more efficiently.

[untothislast]

$this->bbcode_second_pass_quote('jaws', 'A')ll human action is driven by profit.

[bobbyald]

$this->bbcode_second_pass_quote('', 'A')ll human action is driven by profit

[untothislast]

$this->bbcode_second_pass_quote('bobbyald', '')$this->bbcode_second_pass_quote('', 'A')ll human action is driven by profit

[0mar]

$this->bbcode_second_pass_quote('untothislast', '')$this->bbcode_second_pass_quote('bobbyald', '')$this->bbcode_second_pass_quote('', 'A')ll human action is driven by profit

[untothislast]

Remember though, that in one of my earlier replies I said that 'altruism is the saving grace of humanity' - by which I didn't mean that it was the driving force - only that whenever evident, it manages to raise us out of the barbarous mire our more basic urges drag us into.

[Wildwell]

$this->bbcode_second_pass_quote('0mar', '')$this->bbcode_second_pass_quote('untothislast', '')$this->bbcode_second_pass_quote('bobbyald', '')$this->bbcode_second_pass_quote('', 'A')ll human action is driven by profit

[bobbyald]

We are motivated by profit because having control over limited resources aids our survival.

Comfort and stability aids our survival although we may need to move onto pastures new so some amount of risk taking is necessary to aid survival.

If you choose a job that doesn’t pay the maximum possible salary you must be getting something else from it that you believe more than compensates for any lost financial rewards. Remember social standing, relationships, knowledge etc. are all vital components of surviving in a complex world.

If you move a hedgehog from the road the cost to you in lost energy (vital for your survival) is virtually nothing but you gain satisfaction, an improved environment, protection of a potential food source and possibly social standing by moving it. The benefits to survival out weigh the cost.

Try moving the hedgehog and moving on when you and your family are on the point of starvation.


I realise that many will not agree with this but this is how humans (and all life) has evolved over millions of years. If any individual doesn’t act in their own best interest their genes will be filtered from existence. I understand that it is hard to view the world like this as these instincts are hidden deep within our make up, but if you can break through that Altruistic barrier that protects us it all makes sense.

For what it’s worth I also see myself as an honest, kind, caring individual who would help a hedgehog across the road but I’m in no doubt about what we all are inside – survival machines.

[Wildwell]

Nice points...I'm not saying you are wrong and it depends on the individual in my view what the motivation is. It is worth noting on a general basis, most people are in receipt of a wage and government cushions rather than profit. Wages and rewards shouldn’t be mixed up with profit.

So if we are doing things to aid our survival, are people doing that in today's world? Taking into account environmental, resource, social and other problems – which lets face it is the crux of this site? And if not, why not?

[untothislast]

$this->bbcode_second_pass_quote('bobbyald', '
')If you move a hedgehog from the road the cost to you in lost energy (vital for your survival) is virtually nothing but you gain satisfaction, an improved environment, protection of a potential food source and possibly social standing by moving it. The benefits to survival out weigh the cost.

Try moving the hedgehog and moving on when you and your family are on the point of starvation.

[untothislast]

Oh, and with reference to Wildwell's original points, 'profits' are not the problem - but the 'profit-motive' is. If we determine all our decisions on the basis of making an economic profit, we end up closing down a lot of potential opportunities for development and discovery, which we might otherwise discover obliquely.

[Doly]

To return to the main topic, one of the guiding principles of communism was to eliminate profit. Karl Marx wrote extensively about profit and capital, and he saw profit as the root of a lot of problems.

Of course, communism is only one way of running things eliminating profit. There are others. There may be small countries that have implemented other alternatives, but I don't know of any. Anybody is better informed?

[untothislast]

[quote="Doly"]he saw profit as the root of a lot of problems.[quote]

Bearing in mind our innate human fallibilities, it's utopian to expect any system to work along purely communist lines (outside of a reasonably small grouping of genuinely committed individuals) without making some allowance for people's desire to add increased monetary value to their exchanges of goods or labour. The danger, I feel, is when the profit-motive becomes the guiding principle for an entire society's aspirations.

[Doly]

$this->bbcode_second_pass_quote('untothislast', '
')Bearing in mind our innate human fallibilities, it's utopian to expect any system to work along purely communist lines (outside of a reasonably small grouping of genuinely committed individuals) without making some allowance for people's desire to add increased monetary value to their exchanges of goods or labour.

[Jake_old]

But the profits are just paid out as dividends to the shareholders, so in effect they are paid as if they are salaries, especially in owner managed companies.

Its bad practice IMO but happens all the time.